Posted
by
Unknown Lamer
on Thursday January 09, 2014 @05:40PM
from the will-trade-bitcoin-for-socks dept.

New submitter citab writes with news that "the first major retailer is now accepting bitcoins!" In December, Overstock.com announced that they would begin accepting Bitcoin for payment as early as the end of second quarter 2014, but decided to make it a priority task to avoid having someone else beat them to it. From the article: "Last Tuesday, the company struck a deal to handle Bitcoin payments through a service operated by the suddenly hot San Francisco startup Coinbase, and since then, a team of Overstock engineers has worked almost every waking hour to prepare the site for what is undeniably a key moment in the digital currency’s short history. ... [Overstock CEO] Byrne believes this can ultimately boost the company’s bottom line, but that’s not his only aim. For Byrne, a rather opinionated libertarian who’s unafraid to take his company places others fear to tread, embracing the cryptocurrency is as much a political statement as a business decision. Like so many others, he believes Bitcoin can free the world from the control of big banks and big government. 'It helps us fight the machine,' he says."

Because strictly speaking, Silk Road is a marketplace and not a retailer, as it's in the business of connecting independent vendors with customers.

It was also a payment facilitator. Silk Road was more like eBay+Paypal combined, with the exception that you MUST use the Silk Road to pay the seller.

The 27,000 BTC that the FBI seized were such in-transit money - it was escrow money that buyers sent to the Silk Road to pay the sellers in trust. (Of course, Silk Road took a percentage). They still haven't found

It was BTC's "dirty little secret" that as long as you could buy drugs with it, it had value. Losing SR caused panic on the BTC market for exactly that reason.

Bitcoin lost no value because of SilkRoad closure, look at the value of bitcoin when silkroad closed (october 2013, cca 250 USD/BTC) and look at the value now (cca 950 USD/BTC). I wouldn't call it loss. There wasn't even any dramatic drop right after the news broke in october, just look at the graph at bitcoinity.

It was BTC's "dirty little secret" that as long as you could buy drugs with it, it had value. Losing SR caused panic on the BTC market for exactly that reason.

The shuttering of silk road caused panic for only a few hours. The value was recovered in less than 1/4 of a day. But for weeks afterward there were misleading headlines about how Bitcoin had lost half its value. Yes, it did lose its value - for a very short while.

Personally, I was very surprised that the value didn't go farther down and stay there much longer.

Even if they did, I'd wonder what point that is supposed to prove. It isn't as if assassinations haven't been bought with other currencies. Hell, I remember watching a Forensic Files episode where some guy bought an assassination with opals.

Are you saying that no one paid for an assassination in BTC, or that no one who paid for an assassination in BTC got their money's worth?

Allegedly somebody did attempt it twice and got cheated both times by different people. As far as I recall the first time he was cheated by some gang of criminals and the second time he was cheated by FBI.

What does it matter that Overstock is immediately converting bitcoins to USD?

Selling coins reduces the liquidity of the exchanges, purchasing coins increases it.If a large retailer starts selling a lot of coins but people don't begin buying coins at the same rate, the value of the coin itself drops. They don't have the option in the US (or most countries) to pay their workers in bitcoin, because we made it illegal to use Scrip for paying workers due to the horrible abuses it allowed. And for the most part they don't have the option to use the coin to purchase more inventory because most suppliers still aren't accepting it as payment.

There really isn't any good reason for people to rush out and buy bitcoin just so they can buy stuff on Overstock. So the only people who will actually DO that are people who already have coin in their wallet, or people who are intentionally trying to increase the popularity of the currency.

The bitcoin network has obviously created wealth in the world.

Lol, no it hasn't. All it's done is shift wealth around, there is no inherent value to the coin itself.

People who are getting all Drunk on bitcoin really need to look at what happens when private industry is allowed to control currency and payment systems.Here's a start: wikipedia.org/wiki/ScripMake no mistake, bitcoin is not nearly as "decentralized" as people would like you to think, and it's not nearly as free from manipulation as is claimed. The difference is that it's the privately owned Exchanges which get to make the rules, as opposed to governments.

Very well said. BitCoins resemble company scrip more than any other medium of exchange. They are NOT legal tender thus no-one has to exchange them. If I had mod-points I'd use them for you...very rarely do I see an AC post worth moding up...

People who are getting all Drunk on bitcoin really need to look at what happens when private industry is allowed to control currency and payment systems.Here's a start: wikipedia.org/wiki/ScripMake no mistake, bitcoin is not nearly as "decentralized" as people would like you to think, and it's not nearly as free from manipulation as is claimed. The difference is that it's the privately owned Exchanges which get to make the rules, as opposed to governments.

What do you mean by that? Scrip has central authority which controls how is it issued, bitcoin has no such think. What rules did the exchanges make? I thought all the rules are given by the bitcoin protocol described in the original whitepaper: bitcoin.org/bitcoin.pdf. No private industry controls bitcoin.

What does it matter that Overstock is immediately converting bitcoins to USD?

Whether it is even a good idea for them to convert those bitcoin to USD is an open question. If they convert them immediately and end up with less USD than if they had received payment in USD in the first place, that just makes it a complicated (read expensive) scheme for giving some customers a discount. That is probably not a good strategy.

If they hold onto the bitcoins they receive, then that will put a cap on how much they c

They are converting immediately with Coinbase taking the risk, but it would be smarter if they limited themselves to 30 days like Visa. They would drive the price of bitcoin up by doing so and make even more money.

Ross was an idiot who gave away his identity when he first started working on silkroad (forum posts asking for help) and many otherr mistakes, poor opsec, hiring hitmen (cops in disguise), and ordering fake ids (another trap) and much more. He didn't even use tor to connect to the silkroad server in iceland which led to that being located and imaged as well.

Ross was truly and idiot and its amazing how long it took LE to find and catch him at all as he was not trying to stay hidden at all.

ordering fake ids (another trap)... he was not trying to stay hidden at all.

Why did he order fake IDs if he wasn't trying to stay hidden at all? I think you seriously underestimate the difficulty to run hidden service. It's asymetric war, the operator must do everythink correctly, the attacker needs to find only single mistake.

Ross is not an idiot, he is a hero who tried to run usefull service which could save many lives by ensuring some quality of the goods the shop was selling (thanks to user ratings). The idiots are the politicians who run war on drugs and the voters who support them. I feel sorry for his live ruined by the government.

Fuck him. I have no problem with drugs per say, but drug dealers are generally scum. No amount of 'war' will stop the supply, but like fly paper, it is generally a good method for removing dickheads from society.

He tried to murder a scumbag who tried to blackmail him and only because he didn't have any legal recourse. If the blackmailer reported Ross and his users to the authorities the damage to their personal life would be overhelming. Again, it's fault of the law enforcement which rages war on innocent drug users and don't protect its citizens agains serious crimes like blackmailing.

It's not so much that o.co takes BTC, it's that o.co takes a 3rd party payment processor that handles BTC.

It's not any fundamentally different than taking Paypal or Mastercard (for that matter), other than that their merchant agreement might have some sort windows for the currency exchange valuation lock-in.

to overthrow the tyranny of the evil payment and banking system, we will adopt a, uh, payment and banking system.

But since the code and infrastructure is less than 6 months old and depends on companies with less cash flow than lolcats.com instead of being crufty 25 year old code from evil companies with billions of evil fiat currency tokens, it's sure to be an awesome libertarian world changer!

They use coinbase which, like bitpay, will convert the btc into usd for the supplier. They will have their usd payment just as quickly as any other payment processor so there is no issue of the price dropping before an item is even prepared for shipping let alone before it is shipped.

In addition to what the Parent said, there is going to be increased stability in BitCoins as the currency gains acceptance. That stability will cause the currency's value to rise as stability increases, to the point where it becomes THE currency people barter for, rather than USD or EURO. At that point, you'll see sudden decrease in value of the other FIAT currencies, and deflationary nature of BitCoin to start happening.

Are you joking, or did you drink gallons of the bitcoin kool-aid? There's no reason that a single bitcoin should be worth more than $1, much less close to $1,000. It's all based on speculators, rather than any inherent value to bitcoins. Why make early-adopters and the founders of a single crypto-currency wealthy, when we can create new crypto-currencies as needed?

If crypto-currencies catch on, bitcoin will just be one of many, and I expect it to be worth a small fraction of the current bubble price caused by speculators rather than people actually using it as money.

It's base on offer and demand, there is hundreds of copy/paste of Bitcoin (because it's open source) but none of them have the infrastructure and the acceptance as Bitcoin... that's a good reason why Bitcoin worth more.
Also the other alt-coin have even worst "early adopter" holding, for instance Quarks Coin have already 95%+ already mine in a 6 months, while Bitcoin we are at over half in *4* years.

Bitcoins don't have an inherent value, they're just numbers. Gold has an inherent value because it can be used for stuff. Bitcoins don't.

If Bitcoin is meant to replace the US Dollar then the total value of all Bitcoins will have to equal the total value of all US Dollars.There was approximately $1.24 trillion in circulation as of December 25, 2013.There can be no more than 21 million bitcoinsThis puts the value that a bitcoin should have at the time it totally replaces the US Dollar at: 59047.6 US Dollar.

Of course there are issues with this simplification, but it's a nice place to start.

You know that the value of the dollar is largely based on speculation too, right? Specifically, speculation over the US economy.

The way you guys seem to be willing to drive over the cliff and shut down your government over an unrelated political dispute that was supposed to have been settled makes me think that in comparison BTC can't be that bad.

They use coinbase which, like bitpay, will convert the btc into usd for the supplier. They will have their usd payment just as quickly as any other payment processor so there is no issue of the price dropping before an item is even prepared for shipping let alone before it is shipped.

What about BTC transfer delay?You're not guaranteed your transaction is included in the nearest block, nor even a block 6 hours from now. 6 hours is ages in the bitcoin market, and especially in times of panic the time increases.As result, you click "buy" on the item, copy the Overstock address to Bitcoin-QT, enter the desired amount, click "send" and... 3 hours later coinbase receives your bitcoin. And at that time the price doubled.Will Coinbase pay Overstock the price from 3 hours ago?

No, it means a trusted third party is required to transact in BTC at the moment. There's nothing inherent about bitcoin that means it can be traded for alpaca socks, but not pumpkins. If bitcoin becomes more widely used, it's value will stabilise. If it's value stabilises, it'll become accepted by more merchants, including merchants selling food.

Really, you're just re-iterating the same sentiment Ken Olson did: "There is no reason anyone would want a computer in their home". No, there probably wasn't - then

Exactly the same thing as if you order something from a different country and the exchange rate between the two currencies changes. It pretty much always will change in that window, and the vendor just has to make the decision that they are willing to accept the volatility in the value of the currency. Granted, that's asking a lot, as Bitcoin has been known to be very volatile, but it's fundamentally no different to what's already happening.

This is the big game changer right here. This is what has been holding everything back, up until now. With this policy decision things are really going to take off. Clearly it has been the lack of Bitcoin that has been holding Overstock.com back for all this time.

Overstock.com (or O.co, or whatever the hell they're calling themselves these days), must have money to burn... They actually decided they wanted their name associated with the tarp-covered monstrosity of a sewer in Oakland.

They don't actually accept bitcoins (or quote prices in bitcoins). What they do is offer a 3rd party check-out option. At the time of check out, the amount of USD will be converted to bitcoins according to the rate quoted by 3rd party (coinbase) and buyer would have to send the quoted amount. According to FAQ, quotes are valid for 10 minutes.

This mode of payment conveniently comes with a number of restrictions, in particular any orders paid for in this manner are not refundable in either USD or bitcoin, all buyer can get back is store credit.

More importantly, I don't see what is there to gain for bitcoin users. Privacy afforded by bitcoin is lost here since buyer identity is known to at least two parties - Overstock and Coinbase.

How is bitcoin not a fiat currency? Its supply is determined by algorithm instead of by a central bank, but that's not what "fiat" is about. For that matter, its supply is only controlled until it becomes mainstream - if BTC-denominated savings accounts ("eurobitcoins"), BTC futures, and BTC-denominated insurance policies come into play, the supply will be quite uncontrolled.

if BTC-denominated savings accounts ("eurobitcoins"), BTC futures, and BTC-denominated insurance policies come into play, the supply will be quite uncontrolled.

What that will make uncontrolled is promises about giving out bitcoins subject to some criteria. The actual bitcoins themselves will still be limited. The question then is, at what point people will realize that a bitcoin is worth more than a promise by somebody to give you a bitcoin.

> at what point people will realize that a bitcoin is worth more than a promise by somebody to give you a bitcoin.

How is that any different than taking out a loan and promising to pay it back in the future? The risk of non-payment is embodied in the interest rate, along with the risk of you the lender not being around to enjoy the gains. Part of the reason for interest is the lender, being human, has a finite lifespan. When you make a loan you are giving up present use of the money for a larger amount

Sure, but that entirely misses the point. The amount of physical currency in circulation isn't the interesting part of the money supply.

The question then is, at what point people will realize that a bitcoin is worth more than a promise by somebody to give you a bitcoin.

Dollars work exactly the same way, at least to anyone who understands how money works. Everything must be discounted for risk. That doesn't stop inflation. And for "safe" investments, the risk that the promise won't be kept is significantly smaller than inflation.

Although we're talking about mathematically scarce numbers that have no intrinsic value, so they only have value because we believe they have value. So they're only non-traditional-fiat in the sense that they're scarce, not that they're artificial. That makes them moderately less appealing than a stock share. The currency is designed to deflate infinitely, too, and has a fixed, regressive production rate to a fixed quantity. And the designer is anonymo

Anonymity is not a feature of bitcoin transactions or any transactions for that matter, as in order to receive a good you have to give it up at some level to receive that good. The advantage of bitcoin is the lack of central authority, it is an excellent way of transferring funds from country to country without having to go through a bank or physically bringing money across the border. The downside of bitcoin is that it is not backed by anything but the pubic perception of its value so it can be manipulated

Loss compared to "ideal" use of bitcoin. In this case, bitcoin provides no better privacy than using a major credit card. Aside from privacy - what other objective advantages are to bitcoin compared to other payment methods?

What privacy to you think bitcoin provides? The government knows the physical address associated with the IP address associated with every bitcoin transaction. OK, sure it may be easier to use a stolen WiFi than a stolen credit card, but that's a pretty slim advantage.

Why would you believe that? The NSA has the IP addresses associated with every bitcoin transaction ever process (well, maybe they were ignoring it early on), and certainly knows the billing address associated with every IP address at any given moment, or can demand that information at a whim.

Sure, you could just use someone else's WiFi or whatever, just like stolen credit cards are often used for illicit goods, but in that sense a bitcoin transaction is no more anonymous to the government than a CC transac

"Libertarians love it because it pushes the same buttons as their gold fetish and it doesn't look like a "Fiat currency". You can visualize it as some kind of scarce precious data resource, sort of a digital equivalent of gold. Nation-states don't control the supply of it, so it promises to bypass central banks. "

This option is only available for US customers. There's no problem sending US dollars to Overstock. It would be more useful if they exported to China. But then they'd have to deal with inbound customs on the China end.

If overstock was such a huge believer in bitcoin then they would accept it as a payment method. and NO this is NOT what they are doing, they are still only accepting US dollars, they are just supporting a 3rd party payment method that allows people to convert bitcoins. In exchange for this convenience they lose the ability to get a refund.

I think Bitcoin is extremely cool technology, but if I had a company I would not bet the company on the stability of its price right now. I would sell off most of the bitcoins I received as payment for dollars pretty quickly, or just pay a company a small amount to do that for me. Maybe in the future when Bitcoin is accepted in more places then its price will stabilize and that will be an extra step. Bitcoin has to go through a phase where most businesses exchange it immediately to ever get near enough adop

I just love it when bitcoin posts show up on Slashdot. The circle-jerk of anti-bitcoin butthurt makes me so happy. It's quieting down, though. We've got a major retailer accepting bitcoin, now.

Shouldn't you have gotten some bitcoins when they were $0.30 each, not so long ago?

Some of us are paying our taxes in bitcoin. Some of us are paying for gasoline with bitcoin. I am paying for local groceries and Amazon purchases with bitcoin. How long before all you anti-bitcoin circlejerkers realize what you ha

I actually first heard about bitcoin in mid-2011, during the first big price spike, right here on Slashdot. I started mining it back then with my wimpy graphics card. Then that got too hard, so I just started buying them directly. Then I did a crowdfunding campaign with bitcoin that raised 200% of the goal. It's been an amazing experience.

You're welcome.:) Bitcoin does have some problems, and I dearly wish the "nerds" around here would wake up enough to learn about bitcoin so we could have a serious conversation about it. Bitcointalk and reddit are hive minds in my opinion.

Oddly, though, the more I learn about how bitcoin works and how it is intended to work in the future, the more those problems melt away. Almost as if the problem is my own ignorance.

Exactly. I experience the same thing: the more I get into ( the math and distribution system of ) BitCoin, the more my non-understanding and potential problems melt away. The problem does seem, indeed, to be the inertia of my own mind.

This having been said, I *do* think that BitCoin may rather sooner than later be almost as important as fiduciary currency. A highly successful speculator and trader told me this week over lunch: "You know why central banks are warning against BitCoin ? On the one hand, becau

I just love it when bitcoin posts show up on Slashdot. The circle-jerk of anti-bitcoin butthurt makes me so happy. It's quieting down, though. We've got a major retailer accepting bitcoin, now.

Exactly, i'm also pretty amused by the heavily upvoted anti-bitcoin bullshit in every slashdot bitcoin story. It has been 5 years now? I wonder how long would bitcon need to stay or how widespread it would need to become for slashdot to accept it. Maybe the readers here are just too old and conservative and it will never happen, like most old people will never use internet or smartphones or online-banking. I guess when you are of some age you are too old to learn and endorse new technologies.

When you get right down to it, the US dollar is a giant scam. So if we assume that bitcoin is a scam...which is more scammy? Thanks, I'll take the one that isn't engineered to impoverish all but the connected elite.

A few months ago, I saw lots of posts ridiculing bitcoin because no major vendors accepted it. Well, now a major vendor accepts it.:) The thing is, none of these arguments have any merit whatsoever. There are problems with bitcoin, but I have never seen anyone on Slashdot know enough about bitcoin to clearly elucidate any of them.

For a site that is so "nerd-centric", Slashdot sure has a lot of uninformed circle-jerkers. Amazing. And amusing.

It's good business. Bitcoin has got a lot of momentum from people who think like this and feeding their fantasies goes a long way.It's no different than the fanboys who think that everyone who supports Linux in any fashion is rabidly anti-MS. Smart sales people will lean on this because it will generate sales even if the product isn't up to spec of another product and even if what they offer is available on Windows (like Steam games).

Dear moderator, don't you think it's a bit harsh to moderate parent "Troll"? All they are saying is that it seems a tad hypocrite for a multi-million dollar CEO to claim to be doing this "to fight the machine" while it's clearly more "to improve the bottom line" (and the free publicity doesn't hurt either). I know, it barely rises above the daily noise of hypocrite ad campaigns and politicians, and you might be so desensitized that you didn't even notice it (particularly if you're living in the US), but sti